SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
Litigation Release No. 15961 / October 28, 1998
SECURITIES AND EXCHANGE COMMISSION v. JERALD BEAGELMAN, FRED
LYMAN, JOSEPH SANFELLIPO AND ELLIOT STUMACHER, 96 Civ. 3899
(DRH) (E.D.N.Y.)
The Commission announced today that on October 20,
1998, the United States District Court for the Eastern
District of New York entered a final judgment against Jerald
Beagelman ("Beagelman"), the only remaining defendant in SEC
v. Beagelman, 96 Civ. 3899 (DRH)(E.D.N.Y.) and a former
officer and director of Packaging Plus Services, Inc.
("Packaging Plus"). The final judgment permanently enjoins
Beagelman from future violations of the antifraud, corporate
reporting, books and records, and other provisions of the
Securities Exchange Act of 1934 ("Exchange Act"). The final
judgment also orders Beagelman to pay a civil penalty of
$40,000, payable over 18 months. Beagelman consented to the
entry of the final judgment against him without admitting or
denying the allegations in the Commission's Complaint.
In this action, the Commission alleges, in pertinent
part, that during 1990 and 1991, Beagelman, together with
others, engaged in a fraudulent scheme to overstate the
assets, revenue and income of Packaging Plus on its books
and records and in reports filed with the Commission. The
Commission also alleges that, in furtherance of this scheme,
Beagelman improperly recorded franchise fee revenue and
franchise fee receivables on Packaging Plus's books and
records, and executed backdated and otherwise fraudulent
franchise agreements. The Commission further alleges that
Beagelman made material misrepresentations and provided
materially false and misleading documents to a certified
public accountant in connection with the accountant's audit
of certain Packaging Plus financial statements. By engaging
in the foregoing conduct, Beagelman allegedly violated
Sections 10(b), 13(a) and 13(b)(2)(A) of the Exchange Act
and Rules 10b-5, 12b-20, 13a-1, 13b2-1, and 13b2-2.
For further information, see Litigation Release No.
15003 (August 6, 1996) and Litigation Release No. 15535
(October 20, 1997).